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Thursday September 4, 2003
MSC-IAP: More local funds, apps needed for next phaseBy JULIAN MATTHEWS
CYBERJAYA: Members of the Seventh International Advisory Panel (IAP) meeting called for on local funds and investments in newer applications and sciences to be set up to encourage the next phase of Malaysia's Multimedia Super Corridor (MSC) project.
Stanford University Professor William Miller said that the MSC had failed to attract American venture capitalists mainly because venture funding is a "very local business."
"Venture capitalism took over 30 years to develop in California, but it is still very much a local business. You have to be close to companies in order to help them.
"You can't only give money -- that's not enough. You need to be physically there to help at various times," he said.
Miller said he himself had invested in two companies, one in China and another in Brazil, with mixed results. "I didn't know what they were doing, so I couldn't help them," he said.
He added it would take time for local companies to understand where they can play their part. "More local venture funds need to be set up and they need to bring in people who have experience with working with startups to get them going," he said.
Miller however said the progress at the MSC so far was "really quite remarkable."
"If you look at the original schedule, Malaysia is ahead of schedule. Compare the progress here in seven years to Silicon Valley or Taiwan -- this is a faster development," he said.
He said Malaysia has been too modest about its accomplishments so far.
Sun Microsystems chief researcher John Gage said there needs to be more money going to "early seed" organisations. "Recipients need to know that obtaining the money is only the first step in a long process of making a business successful."
Gage agreed with Miller that proximity was a major consideration on why American venture capital companies had yet to take an interest in the MSC.
He said the close relationship of businesses and universities there eased capital flow to the talented.
"Venture capitalists there don't need to go outside their door to receive 10 or 20 proposals. Distance, unfamiliarity with this market, the Asian financial crisis in 1997-98, the downturn and cutting back -- all these factors made it extremely difficult for Malaysia to attract capital in recent years," he said.
Gage added, however, that he was impressed with the continual strategy adjustments, the infrastructure investments, and "very frank and open" discussions IAP members have annually with Prime Minister Datuk Seri Dr Mahathir Mohamad, who is chairman of the IAP.
"Malaysia had compressed in seven years when it took 15 years in Silicon Valley to form the nucleus of relationships that got it going in the 1950s," he said.
Stanford's Miller added that in the second phase, Malaysia needs to take the lead.
"Up till now it's only been following. Now it's time to move ahead of the curve, and get into leading-edge ideas and sciences so other countries can see it as a model.
He cited biotechnology and nanotechnology as areas the country could take a lead in. "In order to compete there, a strong scientific base needs to be developed in the educational system. Information technology (IT) is not deeply scientific as biotech and nanotech," he said.
SGI chairman and CEO Bob Bishop cited complex 3D modelling and digital film content production as possible applications needed for MSC's next wave.
He said SGI has moved its "reality centre" -- a 3D immersive design centre -- from Singapore to Cyberjaya. "We provided the auditorium which is a design centre that enables many engineers and scientists to resolve complex problems collectively."
He cited the haze which has enveloped skies in South-East Asia in recent years as a problem the centre could help alleviate.
"With this 3D modelling application, you can better understand weather conditions in the region and the dangers of the problem. This application can also be used in automobile designs and oil and gas discovery, where it helps geophysicists locate oil and gas.
"These are not problems that can be solved using a PC, a PDA or the cellphone. These are complex problems requiring expertise in advanced tools," he said.
In video production, Bishop said the industry was moving "quite fast" in Malaysia and it has already begun to export its productions.” You need to create content using your imagination by accessing new tools of content creation and digital intellectual property management."
Bishop said the digital film industry was an area to consider in moving ahead.
Bishop, Miller and Gage have consistently attended the annual meeting to advise the Prime Minister and the Malaysian Government on the strategy and direction for the MSC.